The International Organization for Standardization approved a new merchant category code earlier this year that banks will use when processing transactions for gun and ammunition stores after Amalgamated [Bank] submitted an application on the matter.
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“Detection scenarios” are in the works that, if triggered, would prompt banks to file a Suspicious Activity Report to the Treasury Department’s Financial Crimes Enforcement Network
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The strategy would mirror ways banks try to identify and stop fraudsters from using customers’ funds.
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While major payment networks have said they would adopt the new code, some have argued it won’t have its intended effect. Visa Inc., for example, has said it doesn’t have access to data showing the products consumers are actually buying. That means the network and its banking partners would have no idea if a gun-store customer is purchasing an automatic rifle or safety equipment.
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Some conservative policymakers have said they’re concerned lenders will use the data to create an unofficial list of firearm owners in the U.S., which certain government agencies are prohibited from doing.
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